5 internal audits your business needs to carry out
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Internal audits can be used to examine your business for flaws so that you can make necessary improvements. They are typically focused on a specific area of your business. Unlike external audits, they are not carried out by a third-party official – it is you who carries out the audit. It is recommended that all businesses carry out internal audits from time to time.
Financial audits
It’s important that your financial statements are laid out correctly in order to meet accounting principles. A financial audit can be a way of ensuring that everything is organised and there is no missing information. This can be important for filing an accurate tax return. It can also prepare you for the possibility of a tax inspection. A few documents to assemble during a financial audit could include invoices, bills, income documents, account balances and important receipts.
Compliance audits
A compliance audit is carried out to make sure that your company is compliant with necessary rules and regulations. Getting caught out for failing to comply with rules and regulations could result in a lawsuit or a fine. Unfortunately, business law is very extensive and it’s easy to overlook various regulations. By carrying out a compliance audit, you can double-check that you are following all the rules. This could include areas such as employment law, marketing laws and general trading laws. You may be able to talk to a legal advisor for confirmation on certain laws you should be following. Compliance audits can also be used to make sure that you’re following voluntary measures set out by certification boards.
Energy audits
Reducing your company’s energy usage can be good for the environment and your reputation. It can also be a great way of reducing costs within your company. You can work out various ways to reduce your energy consumption by carrying out a business energy audit. This could include looking at places where electricity is being wasted and possibly replacing energy-guzzling machines with newer machines or old incandescent light bulbs with LEDs.
Health and safety audits
A health and safety audit involves checking every area of your business for potential dangers that could result in injury or sickness to you, your employees or customers. You can then find ways of reducing these dangers such as supplying PPE, putting up warning signs, installing barriers or introducing safety protocols. Having strong health and safety measures in place can help to put your employees and customers at ease and it can reduce the chance of future disasters and lawsuits. No matter how safe your business is, it’s always worth carrying out a health and safety audit just in case.
Security audits
Strong security measures can help to protect your business from theft, vandalism and fraud. A security audit can help to identify any weaknesses in your business that could be targeted by an opportunistic criminal. This could include a physical security audit and a cybersecurity audit. Physical security audits can be used to identify any overlooked risks of burglary or trespassing. Cybersecurity audits can meanwhile focus on risks such as hacking and phishing. By making improvements to your security, you can reduce the chance of a future disaster happening.
